Alaska hospital faces closure over $964k telecommunications bill

Cordova (Alaska) Community Medical Center, a 23-bed critical access hospital, may close due to cuts to a federal program that subsidizes the hospital's telecommunications costs, according to KTVA.

The federal Rural Health Care Program provides up to $400 million annually to medical providers in rural areas for telecommunications and broadband services necessary for the provision of healthcare. In March, Universal Service Administrative Company, the program's independent administrator, announced it will reduce RHC Program funding for fiscal year 2017 by 15 percent for individual participants and 25 percent for consortia participants.

"Unfortunately, these deep reductions were announced eight months into the funding year, and were far greater than anticipated," the American Hospital Association wrote in an April 24 letter to Federal Communications Commission Secretary Marlene H. Dortch. "These cuts not only affect the ability of these rural healthcare providers to maintain strong broadband connections but also could force tough decisions affecting funding for essential healthcare services."

The AHA said the cuts are "especially disheartening" to rural hospitals with slim operating margins that have already set their budgets for 2018. Cordova Community Medical Center is one of those hospitals, and it received a letter May 2 from its data services provider seeking $964,370 in back costs.

"We are now 10 months into the current funding year and your funding request is still being put through an 'enhanced review' by USAC," states the letter from Alaska Communications to Cordova Community Medical Center. Alaska Communications said it has used its own cash to pay third parties to maintain the hospital's data service, but it is unable to keep providing those funds.

Alaska Communications requested the hospital pay the full amount due by June 30 or face disconnection of services on July 1.

The hospital's monthly telecom bill is $80,000, but it only pays $1,000 out of pocket after federal funding kicks in. Cordova Community Medical Center CEO Scot Mitchell told KTVA the facility keeps about $400,000 cash on hand and is unable to pay the full bill from Alaska Communications.

Alaska State Hospital and Nursing Home Association President Becky Hultberg told KTVA Cordova Community Medical Center "essentially cannot function" without internet-based reporting and record keeping systems and may be forced to close.